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London Metal Exchange (LME) prices were steady by the close of trade on Monday, with copper consolidating just below $4,000 a tonne despite a weaker dollar and sales by the Chinese government, traders said.

Three-months futures were at $3,975, unchanged from Friday's kerb close.

"The volumes have been fairly routine today and there is no particular driver other than the dollar," Bache Financial's minerals strategist Angus MacMillan said.

The dollar climbed against major European currencies on Monday, hitting a fresh 18-month high against the euro, with the prospect of higher US interest rates continuing to attract investors.

By 1715 GMT the euro was $1.1797 off an earlier low of $1.1796.

"Copper has put in a sterling performance despite the potentially negative news about deliveries into the Shanghai Futures Exchange last week," MacMillan added.

China's State Reserves Bureau is believed to have sold 40,000 tonnes of copper on the Shanghai Futures Exchange, traders said.

Traders estimated the SRB might sell around 100,000 tonnes of copper at home and abroad to rein in record-high prices.

"I tend not to read too much into that. All we are really seeing is metal shuffled from one stockpile to another. It will be interesting how quickly the (stock) increase is drawn down," MacMillan said.

Nearby copper remained tight with the cash-to-three-months spread at $178/181 backwardation.

Aluminium futures backed off from a 10-year high of $2,040 a tonne hit late last week but were seen firmly supported on high energy costs and more fund buying.

Three-months was at $2,023, from $2,027.

"The funds are still in there and will keep on buying. The price is a long way from any short-or medium-term technical numbers but if it reverses it could get very bloody," an LME trader said.

Nickel was at $12,125, up $425, while zinc was at $1,575/76, up $7. Tin was at $6,400, up $50, while lead was at $978, down $4.

Copyright Reuters, 2005


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